PFSweb, Inc. (Nasdaq: PFSW), an international provider of
end-to-end web commerce solutions, today announced its financial
results for the first quarter ended March 31, 2012.
“New business agreements and expanding existing client
engagements continue to drive our strong Service Fee Business
growth, resulting in a 50% increase in Service Fee revenue for the
first quarter of 2012 compared to the first quarter of 2011,”
stated Mark Layton, Chairman and Chief Executive Officer of PFSweb.
“This strong Service Fee revenue growth, coupled with an ongoing
focus on costs, enabled us to report a significant improvement in
our Adjusted EBITDA, which increased more than 475% to $2.6 million
for the first quarter of 2012 compared to the same period last
year.”
Summary of consolidated results for the first quarter ended
March 31, 2012:
- Service Fee revenue increased 50% to
$28.4 million, compared to $18.9 million for the same period in
2011; Service Fee Equivalent revenue (as defined) increased 44% to
$31.2 million, compared to $21.7 million for the same period in
2011;
- Total revenue increased to $74.5
million, compared to $72.4 million for the first quarter of
2011;
- Adjusted EBITDA (as defined) increased
more than 475% to $2.6 million, compared to $0.5 million for the
same period in 2011;
- Net loss was $1.3 million, or $0.10 per
basic and diluted share, compared to a net loss of $2.3 million, or
$0.19 per basic and diluted share, for the first quarter of 2011.
Net loss for the first quarter of 2012 included approximately $0.6
million of relocation related costs and approximately $0.5 million
of lease termination costs, which were both reflected in selling,
general and administrative expenses;
- Non-GAAP net income (as defined) was
$0.1 million, or $0.01 per basic and diluted share, compared to
Non-GAAP net loss of $1.4 million, or $0.11 per basic and diluted
share, for the quarter ended March 31, 2011;
- Total cash, cash equivalents and
restricted cash was $18.4 million as of March 31, 2012, compared to
$18.5 million as of December 31, 2011.
“Our outlook for fiscal 2012 remains positive and we continue to
pursue exciting opportunities within the eCommerce sector. On an
overall basis, we are targeting a year-over-year increase in
Service Fee Equivalent revenue (as defined) of approximately 20% in
2012. This includes growth from existing and new Service Fee
clients, partially offset by the impact from client programs that
we expect will conclude or significantly reduce operations during
2012 and reduced product revenue. While we continue to make certain
investments to support our growth, we are targeting consolidated
Adjusted EBITDA of approximately $8 million to $10 million for
fiscal 2012,” Mr. Layton concluded.
Conference Call Information
Management will host a conference call at 11:00 am Eastern Time
(10:00 am Central Time) on Monday, May 14, 2012, to discuss the
latest corporate developments and results. To listen to the call,
please dial (888) 562-3356 and enter the pin number 74815599 at
least five minutes before the scheduled start time. Investors can
also access the call in a “listen only” mode via the Internet at
the Company’s website, www.pfsweb.com or www.kcsa.com. Please allow
extra time prior to the call to visit the site and download any
necessary audio software.
A digital replay of the conference call will be available
through June 14, 2012 at (855) 859-2056, pin number 74815599. The
replay also will be available at the Company’s website for a
limited time.
Non-GAAP Financial Measures
This news release may contain certain non-GAAP measures,
including non-GAAP net income (loss), Earnings Before Interest,
Income Taxes, Depreciation and Amortization (“EBITDA”), Adjusted
EBITDA and Service Fee Equivalent Revenue.
Non-GAAP net income (loss) represents net income (loss)
calculated in accordance with U.S. GAAP as adjusted for the impact
of non-cash stock-based compensation expense, income (loss) from
discontinued operations, lease termination costs and certain move
related expenses.
EBITDA represents earnings (or losses) before income (loss) from
discontinued operations, interest, income taxes, depreciation, and
amortization. Adjusted EBITDA further eliminates the effect of
stock-based compensation, lease termination costs and certain move
related expenses.
Service Fee Equivalent Revenue represents service fee revenue
plus the gross profit earned on product revenue.
Non-GAAP net income (loss), EBITDA, Adjusted EBITDA and Service
Fee Equivalent Revenue are used by management, analysts, investors
and other interested parties in evaluating our operating
performance compared to that of other companies in our industry.
The calculation of non-GAAP net income (loss) eliminates the effect
of stock-based compensation, income (loss) from discontinued
operations, lease termination costs and certain move related
expenses and EBITDA and Adjusted EBITDA further eliminate the
effect of financing, income taxes and the accounting effects of
capital spending, which items may vary from different companies for
reasons unrelated to overall operating performance. Service Fee
Equivalent Revenue allows client contracts with similar operational
support models but different financial models to be combined as if
all contracts were being operated on a service fee revenue
basis.
PFSweb believes these non-GAAP measures provide useful
information to both management and investors by excluding certain
expenses that may not be indicative of its core operating results.
These measures should be considered in addition to results prepared
in accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. The non-GAAP measures included
in this press release have been reconciled to the GAAP results in
the attached tables.
About PFSweb, Inc.Iconic brands engage PFSweb to enable
their eCommerce initiatives. PFSweb’s End2End eCommerce® solution
includes interactive marketing services, robust eCommerce
technology, global fulfillment and logistics, high-touch customer
care, financial services, and order management. PFSweb’s eCommerce
solutions provide international reach and expertise in both
direct-to-consumer and business-to-business initiatives, supporting
organizations across multiple industries including Procter &
Gamble, L’Oreal, LEGO, Columbia Sportswear, Sorel, Carter’s, Lucky
Brand Jeans, kate spade new york, Juicy Couture, AAFES, Riverbed,
Ricoh, Hawker Beechcraft Corp, Roots Canada Ltd. and Xerox. PFSweb
is headquartered in Allen, TX with additional locations in
Tennessee, Mississippi, Canada, Belgium, and the Philippines.
To find out more about PFSweb, Inc. (NASDAQ: PFSW), visit the
company’s website at http://www.PFSweb.com.
The matters discussed herein consist of forward-looking
information under the Private Securities Litigation Reform Act of
1995 and is subject to and involves risks and uncertainties, which
could cause actual results to differ materially from the
forward-looking information. PFSweb's Annual Report on Form 10-K
for the year ended December 31, 2011 identifies certain factors
that could cause actual results to differ materially from those
projected in any forward looking statements made and investors are
advised to review the Annual and Quarterly Reports and the Risk
Factors described therein. PFSweb undertakes no obligation to
update publicly any forward-looking statement for any reason, even
if new information becomes available or other events occur in the
future. There may be additional risks that we do not currently view
as material or that are not presently known.
(Financial Tables Below)
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidated Statements of Operations (A)
(In Thousands, Except Per Share Data)
Three Months Ended March 31, 2012 2011
REVENUES: Product revenue, net $ 34,725 $ 45,283 Service fee
revenue 28,378 18,900 Pass-thru revenue 11,409
8,206 Total revenues 74,512 72,389
COSTS OF REVENUES: Cost of product revenue 31,856
42,466 Cost of service fee revenue 21,259 13,783 Cost of pass-thru
revenue 11,409 8,206 Total costs of
revenues 64,524 64,455 Gross profit
9,988 7,934 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
10,900 9,288 Loss from operations (912 )
(1,354 ) INTEREST EXPENSE, NET 264 191
Income (loss) before income taxes (1,176 ) (1,545 ) INCOME TAX
PROVISION 109 135 INCOME (LOSS) FROM
CONTINUING OPERATIONS (1,285 ) (1,680 ) LOSS FROM DISCONTINUED
OPERATIONS, NET OF TAX - (603 ) NET INCOME
(LOSS) $ (1,285 ) $ (2,283 ) NON-GAAP INCOME (LOSS) $ 77 $
(1,370 ) NET INCOME (LOSS) PER SHARE: Basic $ (0.10 ) $
(0.19 ) Diluted $ (0.10 ) $ (0.19 ) WEIGHTED AVERAGE NUMBER
OF SHARES OUTSTANDING: Basic 12,765 12,268
Diluted 12,765 12,268
EBITDA $ 1,230 $ 141 ADJUSTED EBITDA $ 2,592 $
451
(A) The financial data above should be
read in conjunction with the audited consolidated financial
statements ofPFSweb, Inc. included in its Form 10-K for the year
ended December 31, 2011.
PFSweb, Inc. and
Subsidiaries
Reconciliation of certain Non-GAAP Items to GAAP (In Thousands,
Except Per Share Data) Three Months Ended
March 31, 2012 2011 NET INCOME (LOSS) $ (1,285 ) $ (2,283 ) Loss
from discontinued operations, net of tax - 603 Income tax expense
109 135 Interest expense 264 191 Depreciation and amortization
2,142 1,495 EBITDA $ 1,230 $ 141
Stock-based compensation 340 310 Lease terminations costs 450 -
Move related expenses 572 - ADJUSTED
EBITDA $ 2,592 $ 451 Three Months Ended
March 31, 2012 2011 NET INCOME
(LOSS) $ (1,285 ) $ (2,283 ) Loss from discontinued operations, net
of tax - 603 Stock-based compensation 340 310 Lease terminations
costs 450 - Move related expenses 572 -
NON-GAAP INCOME (LOSS) $ 77 $ (1,370 ) NET INCOME
(LOSS) PER SHARE: Basic $ (0.10 ) $ (0.19 ) Diluted $ (0.10 ) $
(0.19 ) NON-GAAP INCOME (LOSS) Per Share: Basic $ 0.01
$ (0.11 ) Diluted $ 0.01 $ (0.11 )
Three Months Ended March 31, 2012 2011 TOTAL REVENUES
$ 74,512 $ 72,389 Pass-thru revenue (11,409 ) (8,206 ) Cost of
product revenue (31,856 ) (42,466 ) SERVICE FEE
EQUIVALENT REVENUE $ 31,247 $ 21,717
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidated Balance Sheets (In Thousands,
Except Share Data) March 31,
December 31, 2012 2011
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 18,165 $ 17,695
Restricted cash 212 827
Accounts receivable, net of allowance for
doubtful accounts of $686 and
$663 at March 31, 2012 and December 31, 2011, respectively 41,989
52,679 Inventories, net of reserves of $1,646 and $1,555 at March
31, 2012 and December 31, 2011, respectively 29,977 30,487 Other
receivables 10,187 11,915 Prepaid expenses and other current assets
4,431 4,697 Total current assets
104,961 118,300 PROPERTY AND EQUIPMENT,
net 22,680 14,945 OTHER ASSETS 3,043 3,127
Total assets 130,684 136,372
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 15,661 $ 23,939 Trade accounts payable 43,475
48,544 Deferred rent 956 288 Deferred revenue 7,494 6,766 Accrued
expenses 20,757 18,369 Total current
liabilities 88,343 97,906 LONG-TERM DEBT AND CAPITAL LEASE
OBLIGATIONS, less current portion 4,388 3,583 DEFERRED RENT 5,678
901 OTHER LIABILITIES 4,871 5,908 Total
liabilities 103,280 108,298
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value; 1,000,000 shares authorized; none
issued and outstanding - - Common stock, $.001 par value;
35,000,000 shares authorized; 12,782,907 shares issued at March 31,
2012 and December 31, 2011; and 12,764,546 outstanding as of March
31, 2012 and December 31, 2011 13 13 Additional paid-in capital
104,985 104,645 Accumulated deficit (79,183 ) (77,898 ) Accumulated
other comprehensive income 1,674 1,399 Treasury stock at cost,
18,361 shares (85 ) (85 ) Total shareholders' equity
27,404 28,074 Total liabilities and
shareholders' equity $ 130,684 $ 136,372
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended March 31, 2012 (In Thousands)
Business & PFSweb Retail Connect Eliminations
Consolidated REVENUES: Product revenue, net $ - $ 34,725 $ - $
34,725 Service fee revenue 28,378 - - 28,378 Service fee revenue -
affiliate 1,462 - (1,462 ) - Pass-thru revenue 11,409
- - 11,409 Total revenues
41,249 34,725 (1,462 ) 74,512
COSTS OF REVENUES: Cost of product revenue - 31,856 - 31,856
Cost of service fee revenue 22,048 - (789 ) 21,259 Cost of
pass-thru revenue 11,409 - -
11,409 Total costs of revenues 33,457
31,856 (789 ) 64,524 Gross profit 7,792
2,869 (673 ) 9,988 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
9,532 2,041 (673 ) 10,900
Income from operations (1,740 ) 828 - (912 ) INTEREST EXPENSE, NET
34 230 - 264
Income before income taxes (1,774 ) 598 - (1,176 ) INCOME TAX
PROVISION (BENEFIT) (116 ) 225 -
109 NET INCOME (LOSS) $ (1,658 ) $ 373 $ - $ (1,285 )
NON-GAAP NET INCOME $ (296 ) $ 373 $ - $ 77
EBITDA $ 386 $ 844 $ - $ 1,230 ADJUSTED EBITDA
$ 1,748 $ 844 $ - $ 2,592 A
reconciliation of NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA
follows: NET INCOME (LOSS) $ (1,658 ) $ 373 $ - (1,285 )
Income tax expense (benefit) (116 ) 225 - 109 Interest expense ,
net 34 230 - 264 Depreciation and amortization 2,126
16 - 2,142 EBITDA $ 386 $ 844 $
- $ 1,230 Stock-based compensation 340 - - 340 Lease termination
costs 450 450 Move related costs 572
572 ADJUSTED EBITDA $ 1,748 $ 844 $ - $
2,592 A reconciliation of NET INCOME (LOSS) to
NON-GAAP NET INCOME follows: NET INCOME (LOSS) $ (1,658 ) $
373 $ - $ (1,285 ) Stock-based compensation 340 - - 340 Lease
termination costs 450 - - 450 Move related costs 572
- - 572 NON-GAAP NET INCOME $
(296 ) $ 373 $ - $ 77
Note: Business and Retail Connect includes
our Supplies Distributors and PFSweb Retail Connect operations,
which operate similar financial models on behalf of ourclient
relationships.
PFSweb, Inc. and
Subsidiaries
Unaudited Consolidating Statements of Operations For the Three
Months Ended March 31, 2011 (In Thousands)
Business & PFSweb Retail Connect eCOST
Eliminations Consolidated REVENUES: Product revenue, net $ - $
45,283 $ - $ - $ 45,283 Service fee revenue 18,900 - - - 18,900
Service fee revenue - affiliate 1,664 - - (1,664 ) - Pass-thru
revenue 8,206 - - -
8,206 Total revenues 28,770
45,283 - (1,664 ) 72,389
COSTS OF REVENUES: Cost of product revenue - 42,466 - -
42,466 Cost of service fee revenue 14,348 - - (565 ) 13,783 Cost of
pass-thru revenue 8,206 - -
- 8,206 Total costs of revenues
22,554 42,466 - (565 )
64,455 Gross profit 6,216 2,817 - (1,099 ) 7,934 SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES 8,215
2,172 - (1,099 ) 9,288 Income
(loss) from operations (1,999 ) 645 - - (1,354 ) INTEREST EXPENSE
(INCOME), NET (55 ) 246 - -
191 Income (loss) before income taxes (1,944 )
399 - - (1,545 ) INCOME TAX PROVISION (BENEFIT) (25 )
160 - - 135 INCOME (LOSS)
FROM CONTINUING OPERATIONS (1,919 ) 239 - - (1,680 ) LOSS FROM
DISCONTINUED OPERATIONS, NET OF TAX - -
(603 ) (603 ) NET INCOME (LOSS) $ (1,919 ) $ 239 $
(603 ) $ - $ (2,283 ) NON-GAAP NET INCOME (LOSS) $ (1,609 )
$ 239 $ - $ - $ (1,370 ) EBITDA $ (511 ) $ 652
$ - $ - $ 141 ADJUSTED EBITDA $ (201 ) $ 652 $
- $ - $ 451 A reconciliation of
NET INCOME (LOSS) to EBITDA and ADJUSTED EBITDA follows: NET
INCOME (LOSS) $ (1,919 ) $ 239 $ (603 ) $ - (2,283 ) Loss from
discontinued operations, net of tax - - 603 - 603 Income tax
expense (benefit) (25 ) 160 - - 135 Interest expense (income) (55 )
246 - - 191 Depreciation and amortization 1,488
7 - - 1,495 EBITDA
$ (511 ) $ 652 $ - $ - $ 141 Stock-based compensation 310
- - - 310
ADJUSTED EBITDA $ (201 ) $ 652 $ - $ - $ 451
A reconciliation of NET INCOME (LOSS) to NON-GAAP NET INCOME
(LOSS) follows: NET INCOME (LOSS) $ (1,919 ) $ 239 $ (603 )
$ - $ (2,283 ) Loss from discontinued operations, net of tax - -
603 - 603 Stock-based compensation 310 -
- - 310 NON-GAAP NET
INCOME (LOSS) $ (1,609 ) $ 239 $ - $ - $ (1,370 )
Note: Business and Retail Connect includes
our Supplies Distributors and PFSweb Retail Connect operations,
which operate similar financial models on behalf of our client
relationships.PFSweb and PFSweb Retail Connect include certain
ongoing activity formerly reported as eCOST.
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of March 31,
2012 (In Thousands)
Business & PFSweb Retail Connect
Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 14,441 $ 3,724 $ - $
18,165 Restricted cash - 212 - 212 Accounts receivable, net 28,161
14,099 (271 ) 41,989 Inventories, net - 29,977 - 29,977 Other
receivables - 10,187 - 10,187 Prepaid expenses and other current
assets 2,964 1,467 -
4,431 Total current assets 45,566
59,666 (271 ) 104,961
PROPERTY AND EQUIPMENT, net 22,550 130 - 22,680
RECEIVABLE/INVESTMENT IN AFFILIATES 12,909 - (12,909 ) - OTHER
ASSETS 2,897 146 -
3,043 Total assets 83,922 59,942
(13,180 ) 130,684
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 9,596 $ 6,065 $ - $ 15,661 Trade accounts
payable 9,784 33,962 (271 ) 43,475 Accrued expenses 22,206
7,001 - 29,207
Total current liabilities 41,586 47,028 (271 ) 88,343
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion
4,353 35 - 4,388 PAYABLE TO AFFILIATES - 22,595 (22,595 ) - OTHER
LIABILITIES 10,549 - -
10,549 Total liabilities 56,488
69,658 (22,866 ) 103,280
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common
stock 13 19 (19 ) 13 Capital contributions - 1,000 (1,000 ) -
Additional paid-in capital 104,985 28,059 (28,059 ) 104,985
Retained earnings (accumulated deficit) (79,153 ) (41,045 ) 41,015
(79,183 ) Accumulated other comprehensive income 1,674 2,251 (2,251
) 1,674 Treasury stock (85 ) - -
(85 ) Total shareholders' equity 27,434
(9,716 ) 9,686 27,404 Total liabilities
and shareholders' equity $ 83,922 $ 59,942 $ (13,180
) $ 130,684
PFSweb, Inc. and
Subsidiaries
Unaudited Condensed Consolidating Balance Sheets as of December 31,
2011 (In Thousands)
Business & PFSweb Retail Connect
Eliminations Consolidated
ASSETS
CURRENT ASSETS: Cash and cash equivalents $ 12,818 $ 4,877 $ - $
17,695 Restricted cash 138 689 - 827 Accounts receivable, net
35,881 17,133 (335 ) 52,679 Inventories, net - 30,487 - 30,487
Other receivables - 11,915 - 11,915 Prepaid expenses and other
current assets 3,273 1,424 -
4,697 Total current assets 52,110
66,525 (335 ) 118,300
PROPERTY AND EQUIPMENT, net 14,884 61 - 14,945
RECEIVABLE/INVESTMENT IN AFFILIATES 13,130 - (13,130 ) - OTHER
ASSETS 2,973 154 -
3,127 Total assets 83,097 66,740
(13,465 ) 136,372
LIABILITIES AND
SHAREHOLDERS EQUITY
CURRENT LIABILITIES: Current portion of long-term debt and capital
lease obligations $ 13,918 $ 10,021 $ - $ 23,939 Trade accounts
payable 12,089 36,790 (335 ) 48,544 Accrued expenses 18,747
6,676 - 25,423
Total current liabilities 44,754 53,487 (335 ) 97,906
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS, less current portion
3,513 70 - 3,583 PAYABLE TO AFFILIATES - 22,495 (22,495 ) - OTHER
LIABILITIES 6,809 - -
6,809 Total liabilities 55,076
76,052 (22,830 ) 108,298
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Common
stock 13 19 (19 ) 13 Capital contributions - 1,000 (1,000 ) -
Additional paid-in capital 104,645 28,059 (28,059 ) 104,645
Retained earnings (accumulated deficit) (77,950 ) (40,446 ) 40,498
(77,898 ) Accumulated other comprehensive income 1,398 2,056 (2,055
) 1,399 Treasury stock (85 ) - -
(85 ) Total shareholders' equity 28,021
(9,312 ) 9,365 28,074 Total liabilities
and shareholders' equity $ 83,097 $ 66,740 $ (13,465
) $ 136,372
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